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EMPEROR INTERNATIONAL JOURNAL OFFINANCE AND MANAGEMENT RESEARCH

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ISSN : 2395-5929

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Volume-III Issue-01 January- 2017

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Editor & Founder

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Sri Sankara Arts & Science College,

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Emperor International Journal of Finance and Management Research [EIJFMR] ISSN: 2395-5929

Emperor International Journal of Finance and Management Research [EIJFMR] ISSN: 2395-5929 Page No: 72

A STUDY ON LEADERSHIP STYLE AND ITS IMPACT OF ORGANIZATIONAL

PERFORMANCE

Dr. S. ABDUL SAJID

Principal,

PG and Research Department of commerce,

C. Abdul Hakeem College,

Melvisharam-632509,

Vellore,Tamil Nadu

S. SATHIYAMOORTHY

Research Scholars, (Full Time)

PG and Research Department of Commerce,

C. Abdul Hakeem College, Melvisharam-632509,

Vellore Dist., Tamil Nadu

S. ANBALAGAN

Research Scholars, (Full Time)

PG and Research Department of Commerce,

C. Abdul Hakeem College, Melvisharam-632509,

Vellore Dist., Tamil Nadu

Abstract

The present study aims to investigate the

impact of leadership style on

organizational performance. This research

also studies the leadership styles of

autocratic, bureaucratic, charismatic,

democratic, Laissez-faire, transactional

and transformational leadership styles. The

researchers have taken the

transformational leadership style on the

effectiveness on organizational

performance and so on. This study has

been followed the questionnaire methods

for collecting the information from the

respondents. This research adopted the

statistical tools mean, percentage, and

correlation was used for the analysis of

data. Finally this research concludes that

there is a positive relationship between

transformational leadership style and

effectively organizational performance in

the organizations.

Keywords: Autocratic, Bureaucratic,

Democratic, Transformational leadership

styles and organizational performance.

Introduction

Leadership is a critical management skill,

involving the ability to encourage a group

of people towards common goal.

Leadership focus on the development of

followers and their needs. A leader is a

person who influences, directs, and

motivates others to perform specific takes

and also inspire his subordinates for

efficient performance towards the

accomplishment of the organizational

objectives. Leadership style is a manner

and approach of providing direction,



implementing plans, and motivating the

people and organization.

Leadership has a stronger effect on the

attitude of employees their jobs. The

leader in today`s organization has changed

and the success of any organization relies

on the leadership style by the leader.

Recent facts in the field of economy and

organization have leaded the global market

to rapid change and imbalance.

Competition among organizations and

companies has increased, productivity,

annual profit has decreased and overall

function of worldwide business is being

under target. One aspect of the competitive

challenges faced by organization. It has

frequently been held up as means of

improving employee motivation. With the

improvement come increasing individual

productivity and organizational

performance. Leadership is a regarded as

leaders in doing follower to act for certain

goals that represent the value and

motivations the wands and needs, the

aspirations and expectations of both leader

and followers.

Importance of the study

The study of organizational performance is

a complex and important concept for

human resource managers. Most of

employees do not believe their work is

being properly rewarded, Nor do they

believe that their companies are doing

enough to attract high quality performers,

train them, or manage them effectively.

Organization is a specialized functional

area of business that attempts to develop

programmers, policies, and activities to

promote the organizational performance of

both individual and organizational needs,

goods and objectives. People join

organizations with certain motives like

security of income and organizational

performance, better prospects in the future

of organization, and satisfaction of social

and psychological needs.

Statement of the Problem

Leadership is today`s organization is a

tough business. Organizational leaders

face a number of challenges as their job

and world around them become

increasingly complex. Trends, such as

organizational re-structuring,

globalization, rapid technological

advances, cultural complexity and

increasing demand for employee

empowerment require that managers adopt

techniques and leadership style to meet

these new challenges thus efficiently in

resources mobilization, allocation,

unitization and enhancement of

organizational performance depends to a

large extent. On leadership style but such

is yet to be realized in real life situation of

most implication of this is that such

organizations because of leadership style

they adopt. The implication if this is that

such organizations do not quickly respond.



This study focuses on impact of leadership

style and organizational performance.

Objective of the study

1. To study the concept of leadership

styles on organizational performance.

2. To study the leadership style on

organizational performance in Walaja

Taluk, Vellore District, Tamil Nadu.

3. To study the leadership styles and its

impact on organizational performance.

Research Hypotheses

H1: There is no significant relationship

between leadership style and

organizational performance.

H2: There is no significant relationship

between transformational leadership style

and organizational performance.

Research methodology

The research based on descriptive

methods with questionnaires was used. It

include primary and secondary date were

adopted, employees were selected in

random sampling method. Employees are

selected from organizations in Walaja

Taluk, Vellore District, and Tamil Nadu.

The respondents were selected from

private sector at top, junior and senior

level employees only. 150 questionnaires

were circulated and 125 were collected,

100 questionnaires only valid and

remaining were not filling in the correct

data`s from the respondents. Questions

were asked about leadership style

effectiveness on job satisfaction.

Review of literature

Leadership style

Leadership has been defined in so many

ways that is hard to come up with single

working definition. It has defined as a

body of people who lead and the activities

of group towards a shared goal. It refers to

the ability to lead, direct and organize a

group (Ogbeidi, 2012). Originally drew

attention to the concept of transformational

leader as an individual that inspires other

individuals to perform beyond

expectations (Burns, 1978). Leadership is

the process of influencing the activities of

an organized group in its efforts towards

goal setting and goal achievement

(Stogdill, 1948). The goal of

transformational leadership is to transform

people the organizations in a literal sense

to change them in mind and heart enlarge

vision insight and understandings clarify

purposes make behavior congruent that are

permanent, self-perpetuating and

momentum building (Masi, 2008). Opined

that transformational leader seek new ways

of working, seek opportunities in the face

of risk, prefer effective to efficient answers

and are less likely to support the status

quo. Transformational leader do not

merely react to environmental

circumstances they attempt to shape and

create them (Johnson, 2009).

Transformational leaders are argued to be

visionary and enthusiastic, with an



inherent ability to motivate subordinates

(Howell and Avolio, 1993). It has been

argued that one way in which

organizations have sought to cope with the

increasing volatility and turbulence of the

external environmental is by training and

developing leaders and equipping them

with the skill to cope (Hennessey, 1998).

Leadership style refers to relationship

where by someone uses his way and

methods to make many people work

together for a common goal (Fielder

1969).

Organizational performance

Organizational performance may be

defined as the transformation of inputs into

outputs for achieving certain outcomes.

With regards to its content, performance

informs about the relation between

minimal and effective cost (economy),

between effective cost and realized output

(efficiency) and between output achieved

effectiveness (Chen, Barnes, 2006). An

organization is effective when multiple

stakeholders perceive the organization

effective (Agle et all 2006).The flexibility

and the ability of the organization to take

advantages of its environment in the

acquisition of internal and external

resources indicators of the performance

(Scott, Davis 2007). Organization today

has to be preferment and to meet the

competing expectations of the stakeholders

in a manner which is transparent and

ethical, it is necessary that leaders

internalize transformational behaviors as

the several of the organizations many

depend on it. Intellectual stimulation and

inspirational motivating were found the

improve the organizational performance

(Hancot, 2005)

Conceptual from work of Leadership

styles and its impact of organizational

performance

Autocratic leadership: autocratic leader

are classic “do as I say” types, these

leaders are inexperienced with leadership

thrust upon them in the form of a new

position or assignment that involves

people management. Its retain for

themselves the decision- making rights.

They can damage an organization

irreparably as they force their follower to

execute strategies and services in a very

narrow way, based upon a subjective idea

what success look like vision and

motivation. Autocratic leader is likely to

provide clear expatiations for what needs

to be done, when it should be done, and

how it should be done. There is also a

clear division between the leader and the

followers.

Bureaucratic leadership: create, and rely

on, policy to meet organizational goals.

Policy drives execution strategy, objective

and outcomes. Bureaucratic leader are

most comfortable relying on a stated

policy in order to convince followers to get



on board. In doing so they sent a very

direct massage that policy dictates

direction. Leaders are usually strongly

committed to procedures and processes

instead of people.

Charismatic leadership: by for the most

successful have a vision “as well as

personality that motivates followers to

execute that vision and creativity,

innovation, and is often highly

motivational”. This leader provides fertile

ground for creativity and innovation, and

is often highly motivational. The leaders at

the helm, the organizational members

simply want to follow.

Democratic leadership: As one where

decision-making is decentralized and

shared by subordinates. The biggest

problem with it is underlying assumption

that every one as equal stake in an

outcome as well as shared levels of

expertise with regard to decisions.

A leader usually offers guidance to group

members and is likely to participate in the

group and allow input from other group

members, democratic leader encourage

group member to participate. But retain the

final say over the decision-making process

and more creative are motivated.

Laissez-faire leadership: style involves

non-interference policy. Allows complete

freedom to all workers and has no

particular way of attaining goals.

However, there is no best style of

leadership. The effectiveness of a

particular style is dependent on the

organizational situation. Type of

leadership is considered to be the least

productive. Member of this group are this

likely to make more demands on their

leader, show little corporation and unable

to work. Leaders offer little or no guidance

to group member and leave decision-

making up to group members. While this

style can be effective in situations where

group members are highly qualified in an

area of expertise it offer leads to poorly

and a lack of motivation.

Transactional leadership: followers

perform according to will and the direction

of the leader and leader positively reward

the effort. To maintain stability rather than

promoting change within an organization

through regular economic and social

exchange that achieve specific goals for

both the leader and their follower.

Transformational leadership: this leader

evolved as refinements have been made in

both the conceptualization and

measurement of transformational

leadership to some extent. Theoretically,

leadership is charismatic and follower

pursue to recognize alongside the head and

emulate him are her.



Table: 1 Leadership style and its impact organizational performance.

The leadership inspires follower alongside challenge and persuasion, bestowing both

understanding and managing followers. Leader and desire to motivate them follower as

possessing astonishing skills, persistence and determination and idealized influence the leader

behaviors and the fundamentals that are attributed by follower to the leader. They craft

clearly communicated expectations that followers desire to aims and the shared vision.

Relationship between Leadership Style and its Impact of organizational performance

Si.

No

Questionnaire items S. Agree

/Agree

% Disagree /

S. disagree

% Neither

agree / Nor

agree

% Total

1 Autocratic leadership style 67 67 22 22 11 11 100

2 Bureaucratic leadership style 60 60 25 25 15 15 100

3 Charismatic leadership style 62 62 20 20 18 18 100

4 Democratic leadership style 58 58 29 29 13 13 100

5 Lassies - fair leadership style 55 55 22 22 23 23 100

6 Transactional leadership style 68 68 15 15 17 17 100

7 Transformational leadership style 74 74 18 18 8 8 100

8 Working hours 60 60 27 27 13 13 100

9 Working conditions 58 58 25 25 17 17 100

10 Organizational with leader and

followers relationship

70 70 22 22 8 8 100

11 Organizational work change

process

62 62 25 25 13 13 100

12 Feel & flexibility your

organizational performance

64 64 22 22 14 14 100

13 Organizational performance with

innovation & implementation in job

67 67 14 14 19 19 100

14 Are you satisfied with your

organizational performance

69 69 18 18 13 13 100

Total 894 64 304 22 202 14 1400

According to table (2) based on aggregate

response 894 (64%) indicate the strongly

agree and agree, 304 (22%) indicate the

strongly disagree and disagree while 202

(14%) indicate undecided. This implies

that there is a between leadership style and

organizational performance. There is a

positive relationship between leadership

style and organizational performance. Also

transformational leadership style is more

effectively an organizational performance.

Conclusion

Autocratic Bureaucratic

Charismatic

Laissez-faire

Transformational

Democratic

Laissez-

Laissez-faire

Organizational performance

Effectiveness

High Productivity

High Profitability

Low Absenteeism

Friendly Atmosphere Transactional



The study was aimed to find the

relationship between leadership style and

organizational performance among the

private organizations. The main objective

of the study was to find out the

relationship between leadership style and

organizational. Leadership style has

positive impact on the organizational.

People like to work in free atmosphere and

good working condensations, implement

and innovation provided the leader to

employee is effects on job satisfaction and

more successful high productivity, high

probability, low absentisam and friendly

atmosphere to leader and follower

(employees) in the organization. Leader

have inspire a shared vision for the

stakeholder, engage with challenges to

ensure organizational performance higher

and better, leader should develop their

talents creativity employees jobs and

providing and higher science of challenge

and achievement job rotation, job training,

re - assigning supervision and promotion

until the employee has proven the success

of new task assigned are among the

effective achieved in organizational goals

and mission and vision.

References

1. Anderson, Carol “Job Design: Employee

Satisfaction and Performance in Retail

Stores.” Journal of Small Business

Management. (.22, 9-16, H.1984).

2. Ben, Etim Udoh and Agu.O.U., “Impact of

Transformational and Transactional

Leadership on Organizational

Performance” International Journals of

Business Research (Vo.4, Pp 142-147,

2012).

3. Burns, J.M., Leadership New York.

(Harper 2 Row 1978)

4. Dr. Emmanuvel lriemi Ejere, Ugochukwu

David Abasillim.,” Impact of

Transactional and Transformational

leadership style on Organizational

Performance” The journal of commerce

(vo. 5).

5. Hancott, D.E. “the relationship between

transformational and organizational

performance in the largest public

campanies in Canada” proquest

information and learning company,

AnnaArbor,MI (2005).

6. Hennessey, J.T. “Reinventing

Government: Does leadership make the

different” public administration Review

(58(6) pp522-32 1998).

7. Hoppock, R. “job satisfaction” New York:

Harper Brother (1935).

8. Howell JM, Avolio BJ, “transformational

leadership, transactional leadership, locus

of control and support for innovations: key

predictors of consolidate – business- unit –

peroformance”journal of applied

Psychology” (Vo.78(6) pp891-903, 1993)

9. Johnson, R.M, “Transformational and

Transactional Leadership Performance”

Journal of the academy or Marketing

Science (pp 23-30, 2009).

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